MEDIA reports on the fall of Interfin Bank – particularly by the NewsDay newspaper – have sought to divert attention from the systematic looting spree at the bank and try to apportion some blame elsewhere.
According to the Reserve Bank of Zimbabwe Interfin Bank was closed due excessive non performing insider loans which was clearly a disguised scheme to siphon depositors’ funds leaving the bank a bleeding shell.
Shareholders and directors were awarding themselves massive loans which were not properly approved or secured and failure to repay these loans is what brought down the bank. Bank management ignored prudential lending guidelines and international best practice and transformed the bank into a family piggy bank by certain egoistic shareholders.
According to the RBZ investigation on Interfin, the bank was also found to have violated several banking laws.
“… the unsafe condition of Interfin Bank Limited is attributable to inadequate capitalisation, concentrated shareholding and abuse of corporate structures, high level of non-performing insider and related party exposures, chronic liquidity and income generation challenges,” the central bank report revealed.
It is important to note that Interfin bank, its shareholders and management have not denied or challenged these findings.
The dispute between me and Interfin is well documented as letters of November 2, 2009, August 27, 2009, September 27, 2010, and July 7, 2011, sent directly to Interfin bank directors and shareholders show. This dispute is centred on Century Bank assets which were taken over and rebranded to CFX Bank. CFX Bank assets were then taken over and rebranded as Interfin Banking Corporation. These were illegal, sinister, dubious and fraudulent schemes meant to conceal the illegal take-over of CFX/Century Bank from me.
I have challenged this process from day one and my lawyers have written to the Reserve Bank of Zimbabwe, Registrar of Banks, Zimbabwe Stock Exchange, Securities and Exchange Commission and Interfin Bank Curator stating my position that I expect compensation or my bank to be returned to me in the same way that Trust, Barbican, Royal and Time Bank were returned to their owners.
The fall of Interfin bank is not in my interest, especially before they compensate me for US$ 15.4 million or return my assets. Interfin violated the law during the take-over of my bank. Under the Banking Act, it is illegal to buy or capitalise a bank using borrowed funds. Interfin did exactly that by borrowing money from a money lender and used the money to buy the bank whilst securing the loan with the bank’s shares.
In addition, this violates the Company Act. This is partly the reason why I have been insisting that Interfin illegally and irregularly took my bank hence my demand for the return of the bank.
On June 10, 2011, I issued an accurate and precise cautionary statement on Interfin bank. My “Return Muponda’s Bank” campaign is legal and justified. It’s a legitimate campaign backed by three legal firms on three continents. The campaign was validated after I presented my claim to Credit Suisse and Finance Bank of Zambia who were trying to take over the bank. They did their own background checks and due diligence and were convinced by the seriousness of my claim that they duly pulled out of the deal.
Interfin then unwisely decided to grab my assets without paying me compensation resulting in the current dispute. Whilst the campaign is currently suspended, I reserve the exclusive right to resume it should the curatorship period at Interfin fail to take my interests into consideration.
Interfin bank took over the assets and liabilities of my bank – Century / CFX Bank. Interfin proceeded to acquire a controlling stake in CFX Financial Services Limited well aware of my contention that the latter illegally, unlawfully and irregularly acquired my 309 million shares in Century Bank as evidenced by High Court Case HC 624404.
Interfin are the main beneficiaries of the irregular and unlawful disposal of the shares. It has therefore been unjustly enriched whilst I was correspondingly impoverished, hence my demand that Interfin bank compensates me to the tune of US$15.4 million being 309 million shares multiplied by US$0.05. As already stated, Interfin assumed all the assets and liabilities of CFX Bank and Century Bank.
Further and as already stated, Interfin were fully aware of my equity claim against CFX Bank before it concluded the transaction. I was then specified and could not protect this interest. My lawyers also wrote to the Minister of Finance and Reserve Bank of Zimbabwe to place my position on record.
I was specified on May 28, 2004. I was de-specified on April 29, 2011. I am entitled to reassume control of my assets, in this case the 309 million Century Bank shares. I have repeatedly demonstrated that the shares and the bank were unlawfully and irregularly sold in the first place, and Interfin bank were made aware of my equity claim. Interfin was well aware that they were violating the Prevention of Corruption Act when they were buying ,trading and rebranding my assets since the Act prohibits the buying ,selling or trading of assets of a specified person.
The only reason why we have not filed a new court motion was after strong persuasions to avoid the court process as it may disturb a fragile banking sector. This moral suasion is normal in banking but in no way reduces my rights on my claim for compensation of $ 15.4 million or return of the bank. I am hoping Interfin quickly gets back to its feet and I can get my dues from the bank and its shareholders.
